When most people think of the Federal Reserve, they think of the national debt, inflation, and bailouts. The Federal Reserve is in charge of monetary policy and regulation. Since the Great Inflation, the Fed has played an increasing role in the economy. In response to the Great Recession of 2008, an independent Federal Reserve played its largest role ever during a financial crisis. Many criticized the Fed's response and questioned its influence. Since its inception in 1913, the Federal Reserve has had a dramatic increase in its power and role in monetary policy, is this power too great in a single entity or is there enough oversight over what it does? The Federal Reserve has humble beginnings. In the 1800s, “bank runs” were normal. In times of financial panic, worried consumers would withdraw all their money. These mass rushes would cause a currency shortage. As a result, many banks failed when they ran out of money and were unable to honor deposits. After years of economic instability, Congress passed the Federal Reserve Act of 1913. The Federal Reserve was charged with the control and regulation of the financial sector and monetary policy. The Fed will lend money to member banks or founding banks to make sure there is enough money available in the economy. Each member bank was also regulated by the Fed and required to hold a deposit at one of 12 Federal Reserve banks. (Timberlake). The Federal Reserve was a lender of last resort to member banks and the federal government. The intention was to ease fears and stabilize the economy. The Federal Reserve also monitored the transition from the gold standard to paper currency. It was necessary for the transition to be regulated because gold s...... middle of paper ......ijffinger, Slyvester CW and Jakob De Haan. The political economy of central bank independence. Rep. n. 19. Princeton: Princeton U Priniting Services, 1996. Web. April 10, 2014. Kohn, Donald. “Federal Reserve Independence in the Aftermath of the Financial Crisis: Should We Worry?” Business Economics 48.2 (2013): 104-7. ProQuest. Network. February 23, 2014. Meltzer, Allan. Learn politics from the history of the Federal Reserve. Rep. Social Science Research Network, 04 February 2010. Web. 10 April 2014. Meltzer, Allan H. “The Origins of the Great Inflation.” Review of the Federal Reserve Bank of St. Louis (2005): 145-75. Network. February 14, 2014. Morrison & Foerster. Announcement. The Dodd-Frank Act: a cheat sheet. Np, 2010. Web. February 14, 2014. Timberlake, Richard H. “Federal Reserve System.” The concise encyclopedia of economics. 2008. Library of Economy and Freedom. February 14. 2014.